Procedure & Administration
IRS Enforcement Activities: Past, Present, and Future
1 Joint Committee on Taxation, General Explanation of Tax Legislation Enacted in 1998 (Blue Book), Part II, Title 1, A, 1 (November 24, 1998).
2 Internal Revenue Manual, Section 1.1.1.1.
3 1998 Blue Book, Part II, Title 1, A, 1.
4 See IRS, Report to Congress: IRS Tax Compliance Activities (July 2003): 5 (where the IRS discusses other compliance activity programs that are not addressed herein).
5 U.S. General Accounting Office, Tax Administration—IRS Should Continue to Expand Reporting on Its Enforcement Efforts, GAO-03-378 (January 2003).
6 IRS Data Books, Publication 55B, 1997–2007, and IRS, “Fiscal Year 2006 Enforcement and Service Results,” p. 3. But see TracIRS, About the Data, Data Limitations, Trac Reports, Inc. (January 2008) (where the reliability of IRS data is questioned), available at http://trac.syr.edu/tracirs/aboutData/dataLimitations.html.
7 IRS Data Book 1997, Table 11, Returns Filed, Examination Coverage.
8 IRS Data Book 2007, Table 9, Examination Coverage: Recommended and Average Recommended Additional Tax After Examination, by Type and Size of Return, Fiscal Year 2007.
9 IRS, Reducing the Federal Tax Gap: A Report on Improving Voluntary Compliance (August 2, 2007): 33.
10 IRS Data Book 2007, Table 9.
11 IRS Data Books, 2001–2007.
12 IRS Data Book 2001, Table 10, Examination Coverage: Recommended and Average Recommended Additional Tax After Examination, by Type and Size of Return.
13 IRS Data Book 2007, Table 9.
14 Id.
15 Id.
16 Id.
17 Id.
18 But see Rev. Proc. 2005-32, 2005-23 IRB 1206 (where the IRS states that document-matching activities are not examinations).
19 IRS, Report to Congress: IRS Tax Compliance Activities, Table 9b, Underreporter Program Coverage by Examination Class, Fiscal Years 1996–2002 (July 2003), available at www.irs.gov/pub/irs-soi/rtctab9b.xls.
20 IRS Data Book 2007, Table 9 (showing 134,542,879 individual returns filed); and Table 14, Information Reporting Program, Fiscal Year 2007 (showing 3,403,000 contacts related to underreporting under the document-matching program).
21 IRS, Report to Congress, IRS Tax Compliance Activities, Table 2, Summary of IRS Compliance Activities, Individual Income Taxpayers, Fiscal Years 1996–2002 (July 2003), available at www.irs.gov/pub/irs-soi/rtctab2.xls.
22 IRS Data Book 2007, Table 15, Number of Math Errors, by Type of Error, Calendar Year 2007.
23 Treasury Inspector General for Tax Administration, “The Clarity of Math Error Notices Has Improved, but Further Changes Could Enhance Notice Clarity and Reduce Unnecessary Notices,” 2005-30-154 (September 2005).
24 But see Rev. Proc. 2005-32, 2005-23 IRB 1206 (where the IRS states that document-matching activities are not examinations).
25 Internal Revenue Manual, Part 20.
26 IRS Data Book 1997, Table 7, Number of Returns Filed (1997), and Table 15, Civil Penalties Assessed and Abated (1997); IRS Data Book 2004, Table 10, Examination Coverage: Recommended and Average Recommended Additional Tax After Examination, by Type and Size of Return, Fiscal Year 2004, and Table 27, Civil Penalties Assessed and Abated, by Type of Tax and Type of Penalty, Fiscal Year 2004.
27 IRS Data Book 2005, Table 27, Civil Penalties Assessed and Abated, by Type of Tax and Type of Penalty, Fiscal Year 2005 (revised September 2007), available at www.irs.gov/pub/irs-soi/05db27cc.xls; IRS Data Books 2006 and 2007, Tables 17, Civil Penalties Assessed and Abated, by Type of Tax and Type of Penalty, Fiscal Years 2006 and 2007.
28 IRS Data Books, 1997–2007. See, e.g., Table 17 for 2007.
29 Id.
30 Id.
31 Id.
32 Id.
33 U.S. Government Accountability Office, Report to the Committee on Finance, U.S. Senate, Tax Gap: A Strategy for Reducing the Gap Should Include Options for Addressing Sole Proprietor Noncompliance, GAO-07-1014 (July 2007).
34 Id. at 30.
35 Id.
36 Id.
37 IRS Data Book 2007, Table 17, Notes. See also U.S. GAO, Report to the Joint Committee on Taxation, Tax Administration, IRS’ Abatement Process in Selected Locations, GAO/GDD 99-98 (July 1999).
38 Internal Revenue Manual, Section 20.1.1.1.3.
39 IRS Data Book 1997, Table 15.
40 IRS Data Book 2007, Table 17.
41 Id.
42 IRS, “Fiscal Year 2007 Enforcement and Service Results,” available at www.irs.gov/newsroom/article/0,,id=177701,00.html.
43 IRS, “Enforcement Statistics—Criminal Investigation” (1997–2006 and 1998–2007). Cf. Treasury Inspector General for Tax Administration, “Statistical Portrayal of the Criminal Investigation Function’s Enforcement Activities from Fiscal Year 2000 Through Fiscal Year 2006,” 2007-10-083 (June 6, 2007), available at www.ustreas.gov/tigta/auditreports/2007reports/200710083fr.pdf (Treasury Inspector General Enforcement Activities). But see TracIRS, Trac Reports, Inc. (January 2008) (serious problems in the data systems that the IRS uses to track criminal enforcement activities are well documented and cannot be relied on).
44 Id. See also Treasury Inspector General Enforcement Activities, p. 31.
45 Id.
46 IRS, “Fiscal Year 2006 Enforcement and Service Results,” p. 9.
47 IRS, “Fiscal Year 2007 Enforcement and Service Results,” p. 10.
48 Id.
49 IRS, “Fiscal Year 2006 Enforcement and Service Results,” p. 8; IRS, “Fiscal Year 2007 Enforcement and Service Results,” p. 10.
50 Id.
51 See, e.g., Mintz, “Senate Panel to Hear Alleged IRS Abuse of Taxpayers,” Washington Post, September 20, 1997, p. A1; Johnston, “Senate Committee Is Told of a Vast Range of Abuses by I.R.S.,” New York Times, April 29, 1998.
52 IRS, Reducing the Federal Tax Gap, p. 33.
53 Id. at 33.
54 Id. at 18.
55 Id. at 10.
56 Id. at 18.
57 Id. at 1.
58 Id. at 2.
59 IRS Data Book 2001, Table 10; IRS Data Book 2007, Table 9.
60 IRS Data Book 2007, Table 9. This includes approximately 503,000 returns selected for examination based on the earned income tax credit.
61 Small Business and Work Opportunity Tax Act of 2007, P.L. 110-28. See also Secs. 6694 and 6676.
62 IRS, Reducing the Federal Tax Gap, p. 20.
